The value of insurance agencies continues to grow. In fact, MarshBerry CEO John Wepler said they’re as high as they’ve ever been and those high prices are not deterring those wanting to purchase them.
At a conference in Las Vegas late last month Wepler told 500 agency execs that the M&A market is “explosive” and “private equity has literally taken over the insurance brokerage business. I will tell you today valuations are at the highest point they’ve ever been.”
Wepler said there is now “no oxygen” left at the top with averages topping 10.12 times the EBITDA. “I don’t think it’s a fad. There’s $114 billion in capital on the sidelines trying to get in,” he said.
On another topic, Wepler also said insurance — and brokerages in particular — need to seriously worry about insuretech. “I’m telling you it’s going to be a massive, massive disruption. The insurance industry is ripe for innovation and disruption. I think you can expect disruption in every single type and size of account in your book of business.”
Estimates say there are likely 1,500 tech entrepreneurs, investors and insurance executives involved in insuretech. Those startups are said to be disrupting — as Wepler said — every line of insurance. They are improving the customer experience via the cost of providing insurance, increasing transparency, simplifying processes and empowering customers and it’s all done by employing big data.
Plus, proponents say it even makes the claims process “enjoyable.”
Source links: Insurance Journal — link 1, link 2